NEWS
Oil futures pared some losses on Thursday after U.S. government report showed a rise in weekly crude supplies that was smaller than the “gargantuan” increase reported by a trade group a day earlier. Oil for March delivery fell 65 cents, or 1.3%, to $51.49 a barrel on the New York Mercantile Exchange. Before the EIA data, prices traded around $49.70 and were on pace for the lowest settlement since Feb. 11. The contract on Wednesday broke a three-session winning streak that had lifted prices more than 9%. Although smaller than expected, the U.S. Energy Information Administration on report on Thursday was sill more than double forecasts. EIA reported that crude inventories rose 7.7 million barrels for the week ended Feb. 13. Analysts polled by Platts forecast a crude-stock climb of 3.1 million barrels. American Petroleum Institute report late Wednesday showed U.S. crude supplies jumped a stunning 14.3 million barrels. The discrepancy, in part, has to do with the differences in the ways the groups gather the data. “The U.S. refinery strike, which has been in progress nearly 3 weeks, has surely had an impact on the rising inventories as 9 of the 11 refineries affected by the strike account for roughly 13% or US output capacity,” said Tyler Richey, an analyst for the 7:00’s Report, which offers daily markets commentary. A slowdown in refining would lessen the demand for crude oil.
Last night’s API report “yielded a gargantuan 14 million-barrel build to crude stocks,” said Matt Smith, commodity analyst at Schneider Electric, in a note. The latest EIA data peg total commercial crude inventories at 425.6 million barrels, with the government referring to the total as “the highest level for this time of year in at least the last 80 years.” Supplies are already at a record level “with a few more months of builds to come as we shuffle through refinery maintenance season,” said Smith, ahead of the government figures.
Brent oil also slipped by 17 cents, or 0.3%, to $60.34 a barrel on London’s ICE Futures exchange. The EIA reported that gasoline supplies rose by 500,000 barrels, while distillate stockpiles fell 3.8 million barrels. Analysts polled by Platts expected gasoline inventories to climb by 443,000 barrels and forecast a decline of 2.2 million barrels for distillates, which include heating oil.